EU Turns Up Heat On Microsoft

Under court pressure at home to settle its long-running antitrust case with the Department of Justice, Microsoft may face an even tougher and costly battle in its fight against the European Union.

WASHINGTON, D.C. - Under court pressure at home to settle its long-running antitrust case with the Department of Justice, Microsoft may face an even tougher and costly battle in its fight against the European Union.
EU investigators may seek a massive fine from the software giant and demand that it drop some features from Windows products sold in Europe, The Wall Street Journal reported this week. The EU has the power to levy fines of as much as 10 percent of a companys global revenue in antitrust cases.

Meanwhile, Friday, Oct. 12, was the deadline for Microsoft and the DOJ to reach a tentative settlement of their case or face court-ordered mediation.

On Friday, the DOJ, Microsoft and state attorneys general held a telephone conference to update Judge Colleen Kollar-Kotelly on the status of those talks. But at press time, no announcement about the details of that call had been made. Kollar-Kotelly late last month ordered that a mediator would be imposed on the talks if they failed to bear fruit by Oct. 12.
Microsoft has been found guilty of illegally maintaining its operating system (OS) monopoly, and the DOJ and 18 state attorneys general are pushing for harsh punishments. The parties have until Nov. 2 to settle, or the remedy phase of the case will go forward.
In the European case, the EU accused Microsoft of obstructing its investigation and misleading investigators, The Wall Street Journal said, citing confidential documents. The EU also alleged that Microsoft falsely presented 34 letters from companies supporting its case. The EU found that many of the testimonials had been written by Microsoft or solicited from the companies under different pretexts than the antitrust complaint.

Microsoft officials said they will respond to the allegations in a formal letter to the EU due next month.
The EU has taken on industry giants in the past, but not in the computer industry, said Spencer Waller, director of The Loyola University Chicago Institute for Consumer Antitrust Studies. Fines have run into the hundreds of millions of dollars.
Willy Helin, an EU spokesman, said the private document never should have been leaked, and that the discussion of any fines is premature.
"As a practical matter, the EU never fines anywhere near 10 percent," said Robert Lande, a University of Baltimore antitrust professor.
In the past year, the EU has sent two Letters of Objection to Microsoft, outlining concerns that the company is using its OS monopoly to control the European server market. In addition, the EU is worried about Microsofts continuing strategy of bundling music and video players in its OS.